Paul brings up an interesting question that received no input/comments. On his blog, Paul wrote:
Those of you who sell quality, and have the opportunity to pitch to senior decision makers: What have you found to be the essential answer? And for those who have the experience of taking the message globally, does the same pitch work everywhere, or do you have to adjust the story to accommodate cultural differences?
In the extreme cases of success, where CEOs of major corporations deployed Six Sigma from the top down, hasn’t Six Sigma been sold through finances? Finances work globally and in every language.
As Mark rightly points out to me on Twitter, safety never takes a back seat in the corporation so why does quality?
Looking forward to the discussion.
Several aspects, largely financial:
1) According to research, it takes 10 to 20 times as much investment to gain a new customer as to retain an existing customer – it makes business sense to do your best to retain the existing customer base. Research also shows that the major cause of customer defections is loss of confidence in the quality/reliability of the products.
2) Pulling historical information of the stock price or market valuation before and after product recalls or similar events, and coming up with the average loss of stock price/valuation per incident….and then discussing the possibility of permanent loss of the value of the brand name.
3) Contrasting the negative impact of quality/reliability issues with the favorable impact of strong and visible quality and reliability focus, as with some Japanese car companies.
4) Invoking some concepts from Crosby’s “Quality is Free”.
5) Helping the executive(s) to see the impact they will have, and the legacy they will leave behind, if they champion and drive a highly visible, highly successful quality improvement program.
Thanks for posting this, Michael. My comment about safety was that it SHOULD never take a back seat in a factory or a hospital, but it sadly often does. Paul O’Neill was a rare CEO when he made safety the top priority at Alcoa (and profits followed).
Quality means pride in work, taking care of the customer. Why there should have to be a business case for quality is beyond me. Needing a business case or short-term ROI for quality improvement is a symptom of pretty deep systemic problems in business culture and business education.
If leaders choose a quality program just for ROI, then we could replace that CEO with a robot and an algorithm.
We need leaders to be true leaders — to get out in front and not just react to ROI projections. Leaders like Paul O\’Neill and Ari from Zingerman\’s (http://www.leanblog.org/2012/03/management-lessons-from-zingermans-ari-weinzweig/).
I bet Ari doesn\’t need a business case that shows better quality is good for the business. He\’s wildly successful (being unencumbered by an MBA, I think).
p.s. speaking of quality, I entered the captcha letters wrong and I then had to retype my name, email, and website. Thankfully the comment was not lost. I assume you don’t need an ROI to try to fix that? :-)
Michael, There have been a number of responses to this question already posted on separate blogs. Paul writes these blogs as part of ASQ’s Influential Voices program. I suggest the following links for different perspectives. Some answer the question directly, some offer varying perspectives. More answers will be appearing over the remainder of the month.
Sorry to have missed you two weeks ago in Phoenix.
@Mark-Graban I too, have spent a lot of time around Ann Arbor and consider Ari a business genius and a friend. He speaks to my company’s gathering and caters an annual party we do for about 300 people. I also use most any excuse I can think of to get to the Roadhouse or the Deli. I make excuses on football weekends to head to the Roadhouse instead of tailgating.
I read your blog and have two thoughts.
1) You see Lean in Ari’s words, you are discounting Ari’s contribution to business. What to pick up from Ari is passion and the ability to live up to his message while acknowledging he (and Zingerman’s) is not perfect. If only the leadship of our customer’s had the same mix of passion and humility …
2) Back to Paul’s original question, you don’t have to sell quality to Ari. It is a given in his words and actions. It is a given in the way his people are trained and reinforced. Your comment on replacing with a robot is spot on, if leaders aren’t passionate, consistent and visible they might as well be robots.
Think about the “legends” of Lean or Six Sigma – there is a tone and a way business is done that is set by the Leaders from the top. How do we find, teach, or sell that?
PS – Those of you who do not know why Mark and I are passionate about Zingerman’s can get a taste of the best food available on earth @ zingermans.com. Also the book Mark reference is not Ari’s first book, he has a series of books about food, I suggest The Guide to Better Bacon.
PSS – Zingerman’s mission statement – We share the Zingermans Experience Selling food that makes you happy Giving service that makes you smile In passionate pursuit of our mission Showing love and caring in all our actions To enrich as many lives as we possibly can.
@Gary — I agree that there’s more to Ari’s genius and approach than Lean. My blog is about Lean, so that’s what I focused on…
@michaelcyger A somewhat jaded view on Paul’s question -
It’s hard to sell quality because –
1) Most people think they know what it is (and they are wrong).
2) Most Quality professionals are not well educated in Quality.
3) People who have been taught Lean and/or Six Sigma think they are instant Quality professionals (and they are wrong).
4) Quality Systems are not sexy and the understanding of them has been degraded by ISO and QS 9000.
5) Business professionals are being taught to be profitable by tricks or spending cuts (including people).
5) Where is the next Deming or Juran? It’s certainly not George, Harry, Shook, Liker, Womack, or the myriad of others out there promoting me me me or trying to be a social media rock star.
The problem with Quality is that it is hard, disciplined like Lean, analytical like Six Sigma, and has to be flavored generously with good business sense, good common sense, and unshakable integrity. Turns out there are too many easier ways to make money starting way back when we started exporting jobs to enrich executive bonuses at the expense of loyal employees. Who needs process knowledge when we can get it cheaper in China and take home a few million and think of ourselves as a genius?
@Mark-Graban – I have to disagree that there shouldn’t be a business case for quality. The issue comes when the financial aspect becomes the only criterion.
The difference (you call it passion) seems to be between those who look at their role in the organization as one of ownership vs. stewardship. Much of these same characteristics have been debated between leaders and managers. Good leaders manage well, but all to few managers are able to lead. Good owners are good stewards, but all too frequently stewards are unable to grow their organization. They become very risk averse and want financial certainty, which causes stagnation. If you cut a worker, you have absolutely “saved” the costs of that worker and increased your chances of a problem minutely. Cut a second, and you “save” that cost while increasing your chances of problems just a little bit more. Because the “savings” are very concrete and the increased probability of problems are not, the balance has tipped in the favor of the cost cutting. Everyone (at least any intelligent person) knows that the price will end up being paid, it’s a matter of when. Leaders/Owners don’t allow this to happen as they know the price is too high. Managers/Stewards are looking at the short-term and don’t consider the time horizon for a period in which they are likely to have moved on. This is one of the reasons that most family businesses don’t last more than 3 generations. By the 3rd generation they are so accustomed to having what they have that they fear losing it. Instead of reinvesting and ensuring the vitality of their enterprise, they siphon off their profits and slowly the enterprise dies. They may own the company but they are not “owners.”
Just my 2 cents.
@MBBinWI — great points. I cringe more at the idea of selling quality for short-term ROI vs. long-term financial success of the business.
That short-term / long-term difference is very clear in the hubbub about Goldman Sachs that was in the news today:
As written by a now-former GS exec who got fed up and quit:
At meetings at Goldman, on the other hand, not one single minute is spent asking questions about how we can help clients, Mr. Smith wrote. Its purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a clients success or progress was not part of the thought process at all.
People who care only about making money will not sustain this firm or the trust of its clients for very much longer, warned Mr. Smith.”
How would you “make the case” to the GS CEO that they should focus on the long-term and “make money with the client” instead of coming up with ways to rip them off in the short-term?
I guess the GS CEO knows their “quality” sucks, but they are a public company and it’s “rational” for them to make as much money as they can this quarter?
@Mark-Graban Goldman Sachs quality doesn’t suck, Their values, vision, and mission do. Goldman Sachs are one of the best at doing what they do. Their value system is money – their money and as long as others continue to flow their money to them, it will not change.
@Gary Cone — if quality is defined by the customer and the customer is getting systematically screwed (some would say), I would call that poor quality. That’s just as bad as a car company knowing shipping junk to dealers.
@Mark-Graban Goldman thinks the customer is the person investing in Goldman Sachs and the entire Leadership gets obscenely rewarded for it. Go call what they do poor quality, and no one at Goldman Sachs will hear a word you are saying. They will just write you off as a zealot.
The problem isn’t they have poor processes, they probably have exquisite processes including the process called lobbying.
The problem is their value proposition assuming anyone with any power to change thing thinks there is a problem.
@Mark-Graban – the exception that I would point out, and since you brought up automobiles I’ll use that as the vehicle (patting myself on the back for being so punny), is that there are different customers/price points for different levels of quality. I’m sure that just about anyone would desire the quality of the Bentley, but few are willing to pay what they ask. That doesn’t mean that you shouldn’t get what you pay for, but that the quality should provide a value commensurate with the cost. I think that the problem with GS is that the customers are still paying for the GS of years past, and GS is no longer providing that. Sometimes it’s difficult to find that the foundation is rotten until you get a storm to come up and “stress test” it.
@iSixSigma – how do I point an @ reply at a user with a space in their name??
To Gary – I agree there are lots of problems (values, etc.) with Goldman and others. But the question was framed as “how do we sell people on quality?” not “how to we sell people on not being greedy psychopathic douchebags?”
The studies that show a higher percentage of people in finance are clinically “psychotic” is pretty scary.
@Mark-Graban – If you look under their name, you should see an “@” symbol in front of a name. That’s the username that you should use to direct a response to someone specifically. So, for example, if you look under Gary Cone, you’ll see @garyacone, which is the name to use in a post directed at him. As with your name, Mark Graban, people can direct a message to you with @Mark-Graban, which shows up below.
Back to the main topic, I just finished doing a Q&A session via Skype with a class in a healthcare masters program out east. There were a lot of questions about:
- How do we sell the CEO on Lean?
- How do we convince the CEO and senior leaders to do _______?
- How do we get the CEO to do _________?
Where fill in the blank is different Lean and quality improvement behaviors (go and see, don’t blame, don’t reward suboptimization).
How did other CEOs adopt Six Sigma? Arguably they were copying Jack Welch and/or they heard about it from him.
I’m glad that some healthcare CEOs (like John Toussaint and Gary Kaplan and Patty Gabow) are telling their stories and convincing other CEOs to follow their Lean and quality improvement paths.
Maybe the non-CEOs can’t convince them of anything?
@Mark-Graban Selling Lean is the same as selling Six Sigma. You have to get the attention of the folks who guide the reward system. And by the way the question was on selling Quality, not Lean or Six Sigma. When you only have one tool … Lean and Quality are not the same thing. Neither is Six Sigma and Quality.
Why the comment on Jack Welch? It’s like saying all who choose Lean are following Toyota from decades ago. Discounts human intelligence. No body follows Jack Welch anymore. Why would they and by the way he was the third great executive to embrace Six Sigma. Bob Galvin and Larry Bossidy preceeded him.
Six Sigma has legs because of passionate, committed professionals and a network of CURRENT execs who have benefited from Six Sigma. I suspect it’s the same for Lean.
And for those of us that understand and appreciate both and have been given the time to understand the company we are selling to, we lead with the most important to the company we are talking to at that point in time.
I agree with your tweet from months ago about no such thing as L6S.
@garyacone Why the comment on Jack Welch? Don’t you think it’s true that CEOs followed his lead and/or copied him? That wasn’t meant as any commentary on Jack or Six Sigma. Plenty of CEOs have copied Toyota (although their CEOs never have the public persona that somebody like Jack did).
I talk about Lean because I’m not Six Sigma trained (although I’m trained in statistics). Lean contributes to Quality as does Six Sigma. I wrote “Lean and Quality” because there are different methodologies and approaches. Lean isn’t a cure all, nor is Six Sigma, I think we’d agree on that.
For others who wonder about the tweet comment… I think it’s “Lean and Six Sigma” — two complementary approaches that can co-exist. But I don’t believe that “Lean Sigma” is a single consistent hybrid methodology. That might seem like nitpicking to some, but I think it’s an important point.
@Mark-Graban On Jack Welch, yes many tried to follow his lead and many GE folks rose above their station at their next job because many CEO’s thought they could be the next Jack Welch just by doing Six Sigma. They missed all of the stuff that had been done for the preceding 15 years. GE defectors also never saw the early stuff (half life of a GE Professional was < 5 years in those days), so they went merrily to their next job and proclaimed "I know your problem, you need to be GE" and fell flat on their face.
These days I am as impressed with a GE MBB claim as I am a MBB from Villanova – I usually pass on either unless there is something else compelling in their story.
Look at GE's stock price today. Jack got them through the tech crash of the late 90's basically unscathed, Jeff Immelt has not faired as well and no one actually wants to be like GE. Jack has faded, now everyone wants to be like Steve Jobs, but they aren't that either. By the way, Jeff Immelt may be doing everything right, but he's not Jack Welch.
The new arrogance on the block appears to be coming from packaged goods companies where their exec's who have never worked anywhere else in their life, defect and announce "I know your problem, you need to be (fill in the blank). I won't name names but the most aggressive is the one that was famous for 10 years of double digit growth and had that CEO leave last decade. They will fall flat on their face too. Every company is different and nobody cares how you did it at (fill in the blank). In the meantime, a lot of people get hurt.
I agree with you on the rest.
I’ve used a quote for years: “Nothing convinces people like convinced people.” I’m not sure where I heard it, and I’m almost positive I didn’t come up with it. :)
As an aside, I searched Google for it and see it listed in the March/April 2005 issue of iSixSigma Magazine: “Because nothing convinces people like convinced people, do your research and be prepared to cite examples of success stories.” I’m not in my office otherwise I’d open up my archives and take a look to see if it was actually me that wrote that sentence or someone else.
@Mark-Graban regarding your statement above, “p.s. speaking of quality, I entered the captcha letters wrong and I then had to retype my name, email, and website. Thankfully the comment was not lost. I assume you dont need an ROI to try to fix that? :-)” <– that's my way of getting you to actually sign into your account…you don't have to enter captchas if you sign in. Ha! (I've prioritized that bug for tomorrow's workplan…and yes, it has little to no direct, measurable financial ROI, but hopefully will move us up to a higher ranking on our Net Promoter Score.)
@ Scott Rutherford — please sign up for a free membership at http://www.isixsigma.com/register/ so we can @ mention you in the forum and you’ll be notified. Great resources you pointed us to. I’m not a big blog reader unless they’re on iSixSigma.com, so I appreciate knowing about them.
@GaryaCone — great insights as always. Hope you’re doing better. I just put the finishing touches on your video interview that’s going live on Monday. It’s a fantastic deployment planning resource.
@michaelcyger – You mean we’re going to have to LOOK at him now?
@MBBinWI, huh? Look at whom?
@michaelcyger – “video interview thats going live on Monday”
I’m going to have to rename my sound files to something more generic. These labels just take all the surprise out.
And I haven’t gone back to see if Katie has removed any.
@MBBinWI Haven’t removed a thing. Just listened and enjoyed!
@michaelcyger. So to finally answer your question, we don’t sell quality, we sell bottom line enablers.
What does the customer get? As much as they will let us (remember the question of why are you being nice to me?). They always get bottom line, rational metrics and measurement systems, and happier workers where we have touched. They will also get a robust quality system if there is a rational person to have the discussion with.
Hint – without a robust QS, nothing is sustainable. But man is it a hard sell, not sexy and a lot of work.
Enablers to improved quality and lower costs.
@MichaelCyger You don’t have to sell quality. It is free. It was even a past ASQ President that said so.
Seriously if I step back from the consulting and just look at this as the owner of a factory which I am not sure I can do completely. I absolutely do not understand why poor yields, poor cycletime management, Lean, etc are such a mystery. I had owned this factory for less than 1.5 years when the recession hit. I was not really familiar with the technology. We sat down and created a plan (heavily Lean because cash flow was what was killing everyone) that we believed gave us the best chance of coming out of the other side of this recession. We seem to have made it. There are only 2 of us left in business in the state and we watched 12 others close their doors.Pretty much they chose to stay the course and wait it out.
I made the comment in Miami when we were doing that Q&A. If I would have done the step 1, step 2, etc approach to it I would have had the cleanest bankrupt business in Texas. We understaood what was needed to survive and we executed our best plan. I’m not sure you can really sell that experience to anyone. You pull up to your business for 6 months not knowing if your doors will be padlocked shut.
You find suppliers you can trust and care as much about your success as they do theirs because it is interrelated. To this day I buy material from one company and we worked together to get through it. Today we are more partners that supplier and customer. The whole thing gets complicated but if you operate with integrity and find other people with integrity to do business with it becomes clearer. OK – way off track.
I think if you have to sell it you are talking to the wrong person. If you explain it and they get it or act like they care your ok. When you have to sell it you are p*ssing in the ocean.
Just my opinion
@Mike-Carnell It’s not “how much are you going to pay me for implementing quality” it’s about convincing people that quality benefits everyone…shifting detractors to supporters (or at least neutral bystanders who don’t talk negative about the business initiatives when you leave the room).
Speaking of the iSixSigma Live! Summit & Awards in Miami 2009, I was looking for some pics for JD Sicilia’s retirement party (I think it’s today), and found this: http://photos.isixsigma.com/Other/iSixSigma-Live-Summit-and/7136980_VxdH57#!i=458989119&k=fH5wW That was a great event.
@MichaelCyger As I said in my text it isn’t about me selling consulting. I was rambling a bit earlier. If I just look at it from the standpoint of a factory owner rather than a factory owner/consultant it still makes perfect sense and it really isn’t that complicated.
When a part gets made and it has to be reground. Sure the material is reused but I lost the time, labor and the expense to run the machine. I do not need a CFO to explain that to me. If I can reduce my cycletime on a part from 130 seconds to 120 seconds I get 2 extra parts per hour – 48 per day for the same amount of labor and relatively close to the same operating cost of the machime. When I look in a trash can or dumpster – I paid money for most of what is in there. Still don’t need a CFO to understand it.
This whole concept is not difficult and the recession really drove it home. You should be able to have people understand this with a simple explanation. If you have to sell it to them then they are in the wrong job. It is easy to understand when it is your money. Not sure why is is more difficult to understand when it is not. The logic is still there.
I still have some of those pictures up on my website. Great photographer.
@Mike-Carnell Yes, I understand your point. It’s just a semantic issue, or definition of terms.
You say “explanation” and I say “sell it.” We’re mostly making the same point. I think more in terms of the sale nowadays…my 9 and 4 year olds don’t seem to love my ideas as much as I do. If I “explain” it to them, then are only 20% likely to do it. But if I “selli it”, well, that has a much higher probability of success. :)
There’s a whole process around sales (understanding the customer needs first, speaking in terms they understand, getting them to say “yes” to something, practicing active listening skills so the customer knows you are hearing what they’re saying, etc.). My wife will attest to the fact that I don’t do many of these things well. But I can assure you that if I did do them well, I would get much more accomplished with my family than just “explaining.” That was the only point I was trying to make.
There was another great photo of you and me on stage that I saw on a DVD that’s in my office someplace. I’ll have to dig it up and post it.
@Michaelcyger I understand your point when you are dealing with children particularly when you are into something and they have no context (I thought you had 3 kids). When you have to do anything more than explain (even that amazes me) to anyone working in management these concepts it should be a sign something is seriously wrong. They have context. What they don’t have is any skin in the game.
How many extra programmers do you have sitting around? I will assume the answer is zero. Did anyone need to sell you on the idea that extra payroll doesn’t make sense? No because it is your money. Let’s say your staff is right sized – whatever that means but you have a programmer who is doing a web page that describes how to cook Jambalaya. Does anyone really need to explain to you that is nonvalue added? Does anyone really need to sell it to you? Of course not because it is your money.
If that programmer were a contractor (we don’t even want to open the employee/ contractor can of worms) and he were being paid by the job and you only paid when you were satisfied would he create a page on making Jambalya? Of course not because now we are talking about his time and his money (his not being gender specific).
Just as an fyi I assume your 9 year old is your daughter. Daughters only listen to fathers when it suits them because they know they have fathers wrapped around their little finger. Not a thing you can do about it so you need to learn to live with it. Mine is 30 and I still don’t know how to say no.
@Mike-Carnell & @michaelcyger – tongue against roof of mouth, hum a mid-scale note and let your tongue drop from the roof expelling air in a slight moaning sound. Of course, this is also done in conjunction with opening the wallet and extracting the proper number of $20′s for whatever she wanted. Now that one is in college, there’s no opportunity to say “no”, the charge just shows up on the credit card statement.
@Mike-Carnell & @michaelcyger I think that it’s more fundamental than that. When I was taking my MBA classes, the instructors were of the opinion that a system was optimized when it was “squeezed dry” (actual words used). They did not understand the difference between NVA and reserve capacity needed due to variation. Any 2 data points are never going to be at the extremes of the limits, so why do we set control limits at 3 std dev’s? Because this “reserve capacity” is necessary to accomodate overall variation. Yet management often manages to a straight pipeline constrained around the last 2 data points and wonders why they have systems that are out of control.
I once worked at a company where I was the product manager for a product and given the assignment to develop specs for the next generation product. Problem was, the customers were not looking for any signficant changes. But management said they had to do something with the stable of 30 engineers they had on hand, so get them a new spec so that they could be put to work. Same thing for a production operation where some of the process stations had less to do than others and we were told to reduce the workers that weren’t busy.
No system operates with zero variation, thus sometimes you’ll be balls to the wall, and sometimes you’ll have slack. Seeing the slack and trying to manage to that level is idiotic, yet that’s what’s being taught to these whiz kids who have no experience to tell them better.
Yes, skin in the game should help, but I don’t think that’s the end.
Sorry, poked a sore spot and I had to rant. All better now.
@MBBinWI Let’s take your scenario: “Seeing the slack and trying to manage to that level is idiotic, yet thats whats being taught to these whiz kids who have no experience to tell them better.” It is the same issue you see in manufacturing. A bad process produces defects. So the issue is what they are being taught. Deming made that point decades ago. Looks like nothing has changed.
I have been through 2 GM’s in my factory with MBA’s. Neither understood cash flow. How does that happen? You know who understands cash flow? Farmers and ranchers. Cash hasn’t been as much of an issue since I got those guys.
I’m sticking with my position that CI is so fundemental to someone that has skin in the game. It is their money and I am not talking about a bonus. That just becomes a game of how to we manipulate the metrics to optimize the bonus.
I just spent time in a plastics conference. Easily 80% of the people selling equipment and parts told me about the millions of dollars of inventory they had. If you ask they who pays for it they always tell you they do. They don’t get it but their money isn’t tied up in the inventory. You can ask them about devising a process to make replacement parts faster and they have no idea why you would do that. I had a discussion with a guy who was very proud of their burnin profile. I asked him if he knew what infant mortality was and what caused it. Of course not but it didn’t matter because they burn in so none of those defects get shipped. I agreed that containment was good but not building the defects was cheaper. Didn’t register.
This whole attitude of not seeing more efficient options traces directly to who pays for the inefficiency.
Just my opinion.
@MBBinWI Yea, figured it out but it didn’t excite me.